UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
(Mark One)
For the quarterly period ended
OR
Commission File Number:
(Exact Name of Registrant as Specified in its Charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer |
(Address of principal executive offices) |
(Zip Code) |
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Registrant’s telephone number, including area code
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
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Accelerated filer |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
As of August 10, 2022, the registrant had
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PART I - FINANCIAL INFORMATION |
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Item 1. |
Financial Statements (unaudited) |
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Statements of Operations for the three and six months ended June 30, 2022 and 2021 |
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Statements of Stockholders’ Equity for the three and six months ended June 30, 2022 and 2021 |
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Statements of Cash Flows for the six months ended June 30, 2022 and 2021 |
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Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Item 3. |
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Item 4. |
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PART II - OTHER INFORMATION |
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Item 1. |
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Item 1A. |
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Item 2. |
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Item 6. |
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PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
CLEARSIDE BIOMEDICAL, INC.
Balance Sheets
(in thousands, except share and per share data)
(unaudited)
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June 30, |
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December 31, |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
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Accounts receivable |
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Prepaid expenses |
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Other current assets |
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Total current assets |
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Property and equipment, net |
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Operating lease right-of-use asset |
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Restricted cash |
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Total assets |
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$ |
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$ |
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Liabilities and stockholders’ equity |
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Current liabilities: |
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Accounts payable |
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$ |
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$ |
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Accrued liabilities |
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Current portion of operating lease liabilities |
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Total current liabilities |
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Operating lease liabilities |
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Total liabilities |
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Stockholders’ equity: |
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Preferred stock, $ |
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Common stock, $ |
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Additional paid-in capital |
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Accumulated deficit |
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Total stockholders’ equity |
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Total liabilities and stockholders’ equity |
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$ |
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$ |
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See accompanying notes to the financial statements
3
CLEARSIDE BIOMEDICAL, INC.
Statements of Operations
(in thousands, except share and per share data)
(unaudited)
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Three Months Ended |
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Six Months Ended |
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2022 |
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2021 |
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2022 |
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2021 |
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$ |
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$ |
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$ |
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$ |
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Operating expenses: |
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Research and development |
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General and administrative |
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Total operating expenses |
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Loss from operations |
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Other income |
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Net loss |
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$ |
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$ |
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$ |
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$ |
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Net loss per share of common stock — basic and diluted |
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$ |
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$ |
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$ |
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$ |
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Weighted average shares outstanding — basic and diluted |
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See accompanying notes to the financial statements.
4
CLEARSIDE BIOMEDICAL, INC.
Statements of Stockholders’ Equity
(in thousands, except share data)
(unaudited)
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Six Months Ended June 30, 2022 |
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Total |
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Common Stock |
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Additional |
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Accumulated |
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Stockholders' |
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Shares |
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Amount |
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Paid-In-Capital |
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Deficit |
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Equity |
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Balance at December 31, 2021 |
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$ |
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$ |
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$ |
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$ |
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Exercise of stock options |
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— |
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— |
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Vesting and settlement of restricted stock units |
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— |
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— |
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— |
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— |
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Issuance of common shares under employee stock |
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— |
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— |
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Share-based compensation expense |
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— |
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— |
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— |
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Net loss |
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— |
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— |
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— |
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Balance at March 31, 2022 |
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Exercise of stock options |
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— |
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— |
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Share-based compensation expense |
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— |
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— |
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— |
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Net loss |
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— |
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— |
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— |
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( |
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Balance at June 30, 2022 |
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$ |
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$ |
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$ |
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$ |
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Six Months Ended June 30, 2021 |
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Total |
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Common Stock |
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Additional |
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Accumulated |
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Stockholders' |
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Shares |
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Amount |
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Paid-In-Capital |
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Deficit |
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Equity |
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Balance at December 31,2020 |
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$ |
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$ |
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$ |
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$ |
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Issuance of common shares under a direct |
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— |
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Issuance of common shares under at-the-market |
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— |
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Exercise of stock options |
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— |
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— |
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Vesting and settlement of restricted stock units |
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— |
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— |
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— |
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— |
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Issuance of common shares under employee |
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— |
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— |
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Share-based compensation expense |
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— |
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— |
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— |
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Net loss |
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— |
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— |
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— |
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( |
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( |
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Balance at March 31, 2021 |
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Issuance of common shares under at-the-market |
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— |
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Exercise of stock options |
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— |
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— |
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Vesting and settlement of restricted stock units |
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— |
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— |
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— |
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— |
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Share-based compensation expense |
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— |
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— |
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— |
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Net loss |
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— |
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— |
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— |
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( |
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( |
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Balance at June 30, 2021 |
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$ |
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$ |
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$ |
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$ |
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See accompanying notes to the financial statements.
5
CLEARSIDE BIOMEDICAL, INC.
Statements of Cash Flows
(in thousands)
(unaudited)
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Six Months Ended |
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2022 |
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2021 |
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Operating activities |
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Net loss |
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$ |
( |
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$ |
( |
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Adjustments to reconcile net loss to net cash used in operating activities: |
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Depreciation |
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Share-based compensation expense |
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Gain on extinguishment of debt |
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Changes in operating assets and liabilities: |
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Prepaid expenses and other current assets |
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( |
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Other assets and liabilities |
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( |
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( |
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Accounts payable and accrued liabilities |
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( |
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Net cash used in operating activities |
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Investing activities |
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Net cash used in investing activities |
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Financing activities |
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Proceeds from registered direct offering, net of issuance costs |
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Proceeds from at-the-market sales agreement, net of issuance costs |
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Proceeds from exercise of stock options |
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Proceeds from shares issued under employee stock purchase plan |
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Net cash provided by financing activities |
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Net (decrease) increase in cash, cash equivalents and restricted cash |
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Cash, cash equivalents and restricted cash, beginning of period |
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Cash, cash equivalents and restricted cash, end of period |
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$ |
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$ |
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Supplemental disclosure of noncash financing activities |
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Forgiveness of PPP Loan and accrued interest |
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$ |
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$ |
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Reconciliation of cash, cash equivalents and restricted cash:
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June 30, |
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2022 |
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2021 |
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Cash and cash equivalents |
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$ |
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$ |
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Restricted cash (including $ |
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Cash, cash equivalents and restricted cash at end of period |
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$ |
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$ |
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See accompanying notes to the financial statements.
6
CLEARSIDE BIOMEDICAL, INC.
Notes to the Financial Statements
(unaudited)
1. The Company
Clearside Biomedical, Inc. (the “Company”) is a biopharmaceutical company focused on revolutionizing the delivery of therapies to the back of the eye through the suprachoroidal space (SCS®). Incorporated in the State of Delaware on
The Company’s activities since inception have primarily consisted of developing product and technology rights, raising capital and performing research and development activities. The Company is subject to a number of risks and uncertainties similar to those of other life science companies at a similar stage of development, including, among others, the need to obtain adequate additional financing, successful development efforts including regulatory approval of products, compliance with government regulations, successful commercialization of potential products, protection of proprietary technology and dependence on key individuals.
Liquidity
The Company had cash and cash equivalents of $
Historically, the Company has funded its operations primarily through the sale of common stock and convertible preferred stock, the issuance of long-term debt, and license agreements. On October 25, 2021, the Company announced that the U.S. Food and Drug Administration (the "FDA") approved XIPERE (triamcinolone acetonide injectable suspension) for the treatment of macular edema associated with uveitis, a form of eye inflammation. In January 2022, the Company received $
As further described in Note 13 to the financial statements on August 8, 2022, the Company entered into a Purchase and Sale Agreement pursuant to which it sold its rights to receive royalty and milestone payments due to the Company from XIPERE and certain SCS Microinjector license agreements subject to a cap which may be increased under certain circumstances. Under the terms of the agreement, the Company is entitled to an initial payment of $
The Company has suffered recurring losses and negative cash flows from operations since inception and anticipates incurring additional losses until such time, if ever, that it can generate significant revenue. The Company has no current source of revenue to sustain present activities and does not expect to generate meaningful revenue until and unless the Company's licensees successfully commercialize XIPERE®, its other licensees receive regulatory approval and successfully commercialize its product candidates, or the Company commercializes its product candidates either on its own or with a third party. In the absence of product or other revenues, the amount, timing, nature or source of which cannot be predicted, the Company’s losses will continue as it conducts its research and development activities.
The Company will continue to need to obtain additional financing to fund future operations, including completing the development, partnering and potential commercialization of its primary product candidates. The Company will need to obtain financing to complete the development and conduct clinical trials for the regulatory approval of its product candidates if requested by regulatory bodies. If such product candidates were to receive regulatory approval, the Company would need to obtain financing to prepare for the potential commercialization of its product candidates, if the Company decides to commercialize the products on its own.
Based on its cash and cash equivalents as of the filing date, August 12, 2022, its current plans and forecasted expenses and assuming receipt of $
7
2. Significant Accounting Policies
Basis of Presentation
The Company’s financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
Unaudited Interim Financial Information
The accompanying balance sheet as of June 30, 2022, statements of operations for the three and six months ended June 30, 2022 and 2021, statements of stockholders’ equity for the three and six months ended June 30, 2022 and 2021 and statements of cash flows for the six months ended June 30, 2022 and 2021 are unaudited. The unaudited interim financial statements have been prepared on the same basis as the annual financial statements and, in the opinion of management, reflect all adjustments, which include normal recurring adjustments, necessary for the fair presentation of the Company’s financial position as of June 30, 2022, its results of its operations for the three and six months ended June 30, 2022 and 2021, its changes in stockholders’ equity for the three and six months ended June 30, 2022 and 2021 and its cash flows for the six months ended June 30, 2022 and 2021. The financial data and other information disclosed in these notes related to the three and six months ended June 30, 2022 and 2021 are unaudited. The results for the six months ended June 30, 2022 are not indicative of results to be expected for the year ending December 31, 2022, any other interim periods or any future year or period. These unaudited financial statements should be read in conjunction with the audited financial statements and related footnotes, which are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of income and expenses during the reporting periods. Significant items subject to such estimates and assumptions include revenue recognition, the accounting for useful lives to calculate depreciation and amortization, clinical trial expense accruals, share-based compensation expense and income tax valuation allowance. Actual results could differ from these estimates.
Effects of COVID-19
The COVID-19 pandemic continues to result in global economic uncertainty. Estimates and assumptions about future events and their effects cannot be determined with certainty and therefore require the exercise of judgment. As of the date of issuance of these financial statements, the Company is not aware of any specific event or circumstance that would require us to update its estimates, assumptions and judgments or revise the carrying value of its assets or liabilities. These estimates may change as new events occur and additional information is obtained and are recognized in the consolidated financial statements as soon as they become known. Actual results could differ from those estimates and any such differences may be material to our financial statements.
Revenue Recognition
The Company recognizes revenue from its contracts with customers under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC Topic 606”). The Company’s primary revenue arrangements are license agreements which typically include upfront payments, regulatory and commercial milestone payments and royalties based on future product sales. The arrangements may also include payments for the Company’s SCS Microinjector devices as well as payments for assistance and oversight of the customer’s use of the Company’s technology. In determining the amount of revenue to be recognized under these agreements, the Company performs the following steps: (i) identifies the promised goods and services to be transferred in the contract, (ii) identifies the performance obligations, (iii) determines the transaction price, (iv) allocates the transaction price to the performance obligations and (v) recognizes revenue as the performance obligations are satisfied.
The Company receives payments from its customers based on billing schedules established in each contract. Upfront and other payments may require deferral of revenue recognition to a future period until the Company performs its obligations under the arrangement. Amounts are recorded as accounts receivable when the Company’s right to consideration is unconditional. The Company does not assess whether a contract has a significant financing component if the expectation at contract inception is such that the period between payment by the customer and the transfer of the promised goods or services to the customer will be one year or less.
8
Research and Development Costs
Research and development costs are charged to expense as incurred and include:
Costs for certain development activities, such as clinical trial activities, are recognized based on an evaluation of the estimated total costs for the clinical trial, progress to completion of specific tasks using data such as patient enrollment, pass through expenses, clinical site activations, data from the clinical sites or information provided to the Company by its vendors on their actual costs incurred. Payments for these activities are based on the terms of the individual contracts and any subsequent amendments, which may differ from the patterns of costs incurred, and are reflected in the financial statements as prepaid or accrued expense.
Share-Based Compensation
Compensation cost related to share-based awards granted to employees, directors and consultants is measured based on the estimated fair value of the award at the grant date. The Company estimates the fair value of stock options using a Black-Scholes option pricing model. The fair value of restricted stock units granted is measured based on the market value of the Company’s common stock on the date of grant. Share-based compensation costs are expensed on a straight-line basis over the relevant vesting period.
Compensation cost related to shares purchased through the Company’s employee stock purchase plan, which is considered compensatory, is based on the estimated fair value of the shares on the offering date, including consideration of the discount and the look back period. The Company estimates the fair value of the shares using a Black-Scholes option pricing model. Compensation expense is recognized over the six-month withholding period prior to the purchase date.
All share-based compensation costs are recorded in general and administrative or research and development costs in the statements of operations based upon the recipient's underlying role within the Company.
Cash Equivalents
Cash equivalents consist of short-term, highly liquid investments with an original term of three months or less at the date of purchase.
Concentration of Credit Risk Arising From Cash Deposits in Excess of Insured Limits
The Company maintains its cash in bank deposits that at times may exceed federally insured limits. The Company has not experienced any loss in such accounts. The Company believes it is not exposed to any significant risks with respect to its cash balances.
9
3. Property and Equipment, Net
Property and equipment, net consisted of the following (dollar amounts in thousands):
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Estimated |
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June 30, |
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December 31, |
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Furniture and fixtures |
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$ |
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$ |
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Machinery and equipment |
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Computer equipment |
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Leasehold improvements |
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Less: Accumulated depreciation |
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( |
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( |
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$ |
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$ |
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4. Accrued Liabilities
Accrued liabilities consisted of the following (in thousands):
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June 30, |
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|
December 31, |
|
||
|
|
2022 |
|
|
2021 |
|
||
Accrued research and development |
|
$ |
|
|
$ |
|
||
Accrued employee costs |
|
|
|
|
|
|
||
Accrued professional fees |
|
|
|
|
|
|
||
Accrued expense |
|
|
|
|
|
|
||
|
|
$ |
|
|
$ |
|
||
5. CARES Act Paycheck Protection Program Loan
On April 20, 2020, the Company entered into a loan agreement with Silicon Valley Bank (the “PPP Lender”) under the terms of which the PPP Lender made a loan to the Company in an aggregate principal amount of $
Under the terms of the Note and the PPP Loan, interest accrued on the outstanding principal amount at the rate of
The CARES Act and the PPP provide a mechanism for forgiveness of up to the full amount borrowed. On January 11, 2021, the Company was notified by the PPP Lender that the PPP Loan had been forgiven in full, including approximately $
6. Common Stock
At the Company's Annual Meeting of Stockholders held on June 22, 2022, the Company's stockholders approved an amendment to the amended and restated certificate of incorporation to increase the Company's authorized number of shares of common stock from
7. Stock Purchase Warrants
In September 2016, in connection with a loan agreement, the Company issued warrants to purchase up to
10
8. Share-Based Compensation
Share-based compensation is accounted for in accordance with the provisions of ASC 718, Compensation-Stock Compensation.
Stock Options
The Company has granted stock option awards to employees, directors and consultants from its 2011 Stock Incentive Plan (the “2011 Plan”) and its 2016 Equity Incentive Plan (the “2016 Plan”). The estimated fair value of options granted is determined as of the date of grant using the Black-Scholes option pricing model. The resulting fair value is recognized ratably over the requisite service period, which is generally the vesting period of the awards.
Share-based compensation expense for options granted under the 2011 Plan and the 2016 Plan is reflected in the statements of operations as follows (in thousands):
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
Research and development |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
General and administrative |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
The following table summarizes the activity related to stock options during the six months ended June 30, 2022:
|
|
|
|
|
Weighted |
|
||
|
|
Number of |
|
|
Average |
|
||
|
|
Shares |
|
|
Exercise Price |
|
||
Options outstanding at December 31, 2021 |
|
|
|
|
$ |
|
||
Granted |
|
|
|
|
|
|
||
Exercised |
|
|
( |
) |
|
|
|
|
Forfeited |
|
|
— |
|
|
|
|
|
Options outstanding at June 30, 2022 |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Options exercisable at December 31, 2021 |
|
|
||||||